BACKGROUND - University of Maine...

STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND SS LOCATION PORTLAND

Docket No BCD~CV-16-19

SANDRA L NAPOLITANO Individually and on behalf of WINDHAM Q LLC

Plaintiff

v

ARTHUR NAPOLITANO SR and STEPHEN NA POLIT ANO

Defendants

) ) ) ) ) ) ) ORDER ON PLAINTIFFS MOTION FOR

PRELIMINARY INJUNCTIVE RELIEF ) ) ) ) )

Plaintiff Sandra L Napolitano individually and on behalf of Windham Q

LLC (Windham Q) has filed a motion pursuant to Maine Rule of Civil Procedure

65 for an order granting preliminary injunctive relief against Defendants Arthur

and Stephen Napolitano Based on the following Plaintiffs motion for

preliminary injunctive relief is denied

BACKGROUND

Plaintiff and Defendant Arthur Napolitano are husband and wife (Sandra

Napolitano Aff -r 2) According to Plaintiffs affidavit Plaintiff and Arthur

Napolitano are each 50 members and the sole managers of Windham Q LLC

which operates a Dairy Queen franchise located in Windham Maine (Id)

Defendant Stephen Napolitano is Arthur Napolitanos son and the general

manager of the Dairy Queen store (Id -r 4)

According to Plaintiffs affidavit in the spring of 201 3 she became

concerned that Stephen Napolitano was using Windham Qs funds to pay his

personal expenses (Id ilif 3-4) Plaintiff requested that Arthur investigate the

matter (Id ~ 5) Arthur Napolitano assured her that Windham Q had not paid

any non-business expenses (Id) Plaintiff became concerned about Windham

Qs expenses again in May 2014 and requested that a forensic audit of Windham

Q be conducted (Id rr 6 8) Arthur opposed the audit (Id r 9)

Stephen Napolitano asserts that Windham Qs payment of certain

personal expenses was approved as part of his benefits package as the general

manager of the Dairy Queen (Stephen Napolitano Aff r 4) Stephen asserts

that in response to Plaintiffs complaints about the expenses Arthur Napolitano

increased his compensation and curtailed the practice of using Windham Qs

credit card to pay certain expenses (Id r 9) Plaintiff asserts that Arthur did

not discuss Windham Qs payment of Stephens personal expenses with her and

she did not approve the practice (Sandra Napolitano Aff rr 12 19)

According to Plaintiff Stephen Napolitano wrote a-letter to her -attorney

in October 201 4 admitting that certain personal expenses were paid for using

Windham Qs funds and stating that he was reimbursing Windham Q for those

expenses (Id r 14) Plaintiff does not believe that Stephen fully reimbursed

Windham Q for all of the personal expenses paid by the company (Id r 1 5)

2

Plaintiff requested Arthur Napolitano remove Stephen as the general manager of

the Dairy Queen but Arthur refused to do so (Id r 1 6)

Plaintiff filed a civil complaint individually and on behalf of Windham Q

with the Superior Court on August 26 2015 Plaintiffs complaint asserts

claims for breach of fiduciary duty conversion to recover money owed unjust

enrichment and fraud against Arthur and claims for conversion to recover

money owed unjust enrichment fraud breach of duty of loyalty and breach of

contract against Stephen Plaintiffs complaint also seeks an order

reconstituting the governance of Windham Q and removing Arthur and Stephen

from any positions overseeing the operation of Windham Q

Arthur Napolitano filed an answer to the civil complalnt on September 18

201 5 Stephen Napolitano filed his answer on September 24 201 5 Stephen

Napolitano amended his answer on February 11 2016 and added a

counterclaim against Plaintiff seeking a declaratory judgment that the parties

had agreed that Stephen would receive an ownership interest in Windham Q in

exchange for agreeing to work as the general manager of the Dairy Queen store

(Stephen Napmiddotolitano Am Ans amp Countercl rr 13-14)

Arthur Napolitano also filed a complaint for divorce with the District Court

on September 29 201 5 Plaintiff filed an answer and counterclaim for divorce

on October 6 201 5 On January 1 3 201 6 the District Court appointed a

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Referee to conduct an audit of Windham Q to produce an audit report 1 and to

monitor and report on the financial and operational performance during the

pendency of the divorce action (FM-1 6-02 Order of Appointment 1 )

Both the civil action and family action were accepted for transfer to the

Business and Consumer Court in June 201 6 Although not consolidated the

two cases are being coordinated before the Business and Consumer Court The

Referee filed his first report in the family action on August 5 2016 (the

Referees Report)

Plaintiff filed a motion for preliminary injunctive relief on August 91 201 6

Plaintiff seeks a preliminary injunction ordering the following (1) that Stephen

Napolitano be removed as general manager (2) that the scope of the Referees

role be expanded to include (a) hiring a neutral third-party general manager to

oversee the day-to-day operations of the Dairy Queen store and (b) continued

oversight of Windham Qs finances (3) that a new accountant be hired by

Windham Q at the recommendation of the Referee ( 4) that the new accountant

conduct a complete review of the prior six tax years to determine if the parties

tax returns and Stephen Napolitanos W-Zs should be amended (5) that

Defendants pay the costs of the Referee and (6) any other relief the court

deems just (Pl Mot Prelim lnj 1 8-1 9)

4

Defendants filed an oppositionmiddot to the motion for preliminary injunctive

relief on August 31 201 6 Plaintiff replied on September 8 201 6 Plaintiff

also filed an addendum to her reply on October 11 201 6 Oral argument on

all pending motions in this case was held on October 12 2016

STANDARD OF REVIEW

Ordinarily to obtain a preliminary injunction a plaintiff must produce

prim a facie evidence of the following ( 1 ) the plaintiff will suffer irreparable

injury if the injunction is not granted (2) the irreparable injury to the plaintiff

outweighs any harm to the defendant from granting the injunction (3) the

plaintiff is likely to succeed on the merits of his or her claims and (4) the public

interest will not be adversely affected by granting the injunction Bangor

Historic Track Inc v Dept ofAgric Food amp Rural Res 2003 ME 140 iJ 9 837

A Zd 1 29 Failure to demonstrate that any one of the criteria is met requires

the motion for preliminary injunction be denied Id iJ 10 In determining

whether to issue a preliminary injunction the court may rely on evidence

presented in sworn depositions affidavits oral testimony or a verified

complaint 3 Harvey Maine Civil Practicesect 654 at 333 (3d ed 2011 )

Because Plaintiffs motion seeks an injunction compelling Defendants to

take affirmative actions Plaintiffs motion is one for mandatory injunctive relief

See Horton amp McGehee Maine Civil Remediessect 5-2 at 1 00 (4th ed 2004) The

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purpose of a preliminary injunction is to preserve the status quo pending final

judgment Dep 1t of Envtf Prat v Emerson 563 AZd 762 771 (Me 1989)

Because a mandatory injunction by its very nature will alter the status quo

courts do not readily enter mandatory preliminary injunctions Id However the

mere fact that a preliminary injunction sought by a plaintiff has mandatory

aspects does not ipso facto render the motion invalid Id Rather to obtain a

mandatory preliminary injunction the plaintiff must meet a higher burden

Horton amp McGehee Maine Civil Remediessect 5-2 n14 at 1 00 In addition to the

other criteria the plaintiff must show a clear likelihood of success on the

merits Emerson 563 AZd at 771 (emphasis supplied)

ANALYSIS

As discussed above Plaintiff seeks a mandatory preliminary injunction

removing Stephen Napolitano as general manager removing Windham Qs

accountant and expanding the role of the Referee (Pl Mot Prelim lnj 18-19)

Plaintiff argues that if the mandatory preliminary injunction is not granted

Stephen Napolitano will continue to mismanage Windham Q continue to use

Plaintiffs and Arthur Napolitanos money to pay his personal expenses and that

Windham Q will continue to file improper tax returns (Id at 1 6)

6

A The Referees Report

The court first addresses the threshold matter of the Referees Report

Plaintiff largely relies on the Referees Report filed in the related divorce action

as evidentiary support for her motion (Id at 5-11 ) However because the

Referees Report is not sworn evidence it cannot be considered by the court in

deciding the motion for preliminary injunction 1 As previously discussed in

determining whether to issue a preliminary injunction the court may rely on

evidence presented in sworn depositions affidavits oral testimony or a verified

complaint 3 Harvey Maine Civil Practicesect 654 at 333

The Referees Report has not been sworn to and no affidavit has been

filed by the Referee stating under oath that the contents of the Report to the

best of his personal knowledge are true and accurate Therefore because

Plaintiff largely relies on the unsworn Referees Report Plaintiff has not provided

sufficient proper evidence in order to obtain preliminary injunctive relief 2

1 In their opposition Defendants assert that the Referees Report is not admissible evidence in this case because it was filed in the separate divorce action (Defs Oppn to Pl Mot Prelim lnj 11-1 2) In her reply Plaintiff asserts at a trial management conference on June 7 2015 the parties verbally agreed that the Referees Report would apply to both proceedings (Pl Reply to Defs Oppn to Pl Mot Prelim lnj 2) Because the court finds that the Referees Report is not properly before the court on the motion for preliminary injunctive relief the court need not decide that this juncture whether the Referees Report is admissible in the civil action

2 Additionally attached to Plaintiffs reply and her addendum are a number of additional exhibits purported to show that Stephen Napolitano used Windham Qs credit card to pay for personal expenses See (Pl Reply to Oefs Oppn to Pl Mot Prelim lnj

7

B The Merits of the Mot ion for Preliminary Injunction

Moreover even if the court were to consider the Referees Report

Plaintiff has still failed to produce prima facie evidence that she or Windham Q

will suffer an irreparable injury if the preliminary injunction is not granted An

irreparable injury is an injury for which there is no adequate remedy at law

Bangor Historic Track Inc 2003 ME 140 -r 10 83 7 A2d 1 29 (internal

quotation marks and citation omitted) Although there is no comprehensive rule

for measuring the adequacy of a legal remedy where a plaintiff is entitled to

money damages and the plaintiff has not demonstrated that damages would be

uncollectable from the defendant the legal remedy will be deemed adequate

Horton amp McGehee Maine Civil Remedies sect 5-3(a) at 101-02 Levesque v

Pelletier 144 Me 245 249 68 AZd 9 11 (1949)

In his Report the Referee identified numerous credit card charges to the

business from 201 2 to 2014 Hwhere the business purpose was not readily

apparent (Referee Report 1 3) These included gas charges drugstore

charges EZ Pass tolls groceries maintenance charges office supplies car

Exs D-G J Pl Addendum to Reply Exs L-0) Like the Referees Report no affidavit has been filed swearing to the authenticity of these documents Therefore like the Referees Report those exhibits cannot be considered by the court See 3 Harvey Maine Civil Practicesect 654 at 333 Also like the Referees Report even if the court were to consider these documents there is no indication that Plaintiff would not be entitled to damages or that such damages would be uncollectable from Defendants See Horton amp McGehee Maine Civil Remediessect 5-3(a) at 101-02 Levesque 144 Me at 249 68 AZd at 11

8

maintenance travel expenses medical charges Amazon and iTunes charges

meal charges department store charges and $1 67 77 500 of other

questionable charges (Id at 1 3-14) The Referee also noted numerous annual

expenses where the business purpose was not clearly determinable (Id at

11) These expenses included automobile repairs cable television internet

payments to multiple vendors tolls travel expenses and yard work (Id at 8shy

11 ) The Referee also noted a high rate of variance between the businesss

register tapes and daily deposits which demonstrated a significant system

failure made validating the daily deposit amounts difficult and revealed certain

commingling of personal and company funds (Id at 1 5-18)

Even if the Referees findings constitute prima facie evidence of an injury

to Plaintiff and Windham Q Plaintiff has not demonstrated that she is without

an adequate remedy at law Plaintiff has not cited and the court is not aware

of any legal authority that would prevent Plaintiff from recovering monetary

damages for the above injuries Plaintiff has also not put forth any evidence

that monetary damages would be uncollectable from Defendants Thus Plaintiff

has not demonstrated an injury for which there is no adequate remedy at law

Moreover additional findings in the Referees Report actually demonstrate

that Plaintiff is unlikely to suffer irreparable injury if the preliminary injunction is

not granted In his report the Referee noted that a number of questionable

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expenses had actually declined in 2015 and 2016 (Id at 11) The Referee

noted that there had been a complete stop in payments by Windham Q for auto

repairs gas tolls travel and yard work and a decline in payments for office

expenses supplies and telephone expenses (Id at 8-11 ) Thus based on the

findings in the Referees Report the alleged injuries to Plaintiff have ceased or

declined in the past two years Therefore contrary to Plaintiffs assertions the

Referees Report actually demonstrates it is unlikely that she will suffer a

continued irreparable injury if the preliminary injunction is not granted

Plaintiff argues that Stephen Napolitano has ceased his alleged tortious

behavior while under the scrutiny of the Referee and this court (Pl Mot Prelim

lnj 16) Plaintiff argues that if the Referees role is not expanded Stephen

Napolitano will likely resume his alleged tortious behavior (Id) Plaintiff has

cited no evidence to support this speculation (Id)

Therefore even if the court were to consider the Referees Report

Plaintiff has still failed to demonstrate an irreparable injury in order to obtain a

mandatory preliminary injunction Because failure to demonstrate that any one

of the criteria is met requires the motion be denied the court would not even

reach the other criteria for preliminary injunctive relief See Bangor Historic

Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION

Based on the foregoing Plaintiff Sandra L Napolitanos motion

individually and on behalf of Windham Q LLC pursuant to Maine Rule of Civil

Procedure 65 for preliminary injunctive relief is DENIED

The Clerk is instructed to enter this Order on the docket for this case

incorporating it by reference pursuant to Maine Rule of Civil Procedure 79(a)

Richard Mulhern Dated J2 t) G

Judge Business amp Consumer Court

Ent~rec on th~ Docket__~ Copies sent va Mail__ Elecronically__ ~

11

STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND SS LOCATION PORTLAND Docket No BCD-CV-1 6-19


Plaintiff

v

ARTHUR NAPOLITANO SR and STEPHEN NAPOLITANO

Defendants


PARTIAL SUMMARY JUDGMENT ) ) ) ) )

Plaintiff Sandra L Napolitano has moved for summary judgment pursuant

to Maine Rule of Civil Procedure 5 6 on Defendant Stephen Napolitanos

counterclaim for declaratory judgment and injunctive relief For the following

reasons Plaintiffs motion is denied in part and granted in part

BACKGROUND


Napolitano Aff r 2) Plaintiff and Arthur Napolitano are each 50 members

and the sole managers of Windham Q LLC (Windham Q) which operates a

Dairy Queen franchise located in Windham Maine (Id) Defendant Stephen

Napolitano is Arthur Napolitanos son and has worked as the general manager of

the Dairy Queen for more than sixteen years (Sandra Napolitano Aff r 4

Stephen Napolitano AddI SMF r 19)


with the Superior Court on August 26 201 5 Plaintiffs civil complaint generally

asserts that Stephen Napolitano has misused Windham Qs funds to pay his

personal expenses and that Arthur Napolitano has made improper distributions

and failed to act in the best interests of Windham Q (Campi ~I 20-46)

Arthur Napolitano filed an answer to the civil complaint on September 18

201 5 Stephen Napolitano filed his answer to the civil complaint on September

24 201 S Arthur Napolitano also filed a complaint for divorce with the District

Court on September 29 201 S Stephen Napolitano amended his answer to the

civil complaint on February 11 2016 to add a counterclaim against Plaintiff for

declaratory judgment that the parties had agreed that Stephen would receive an

ownership interest in Windham Q in exchange for agreeing to work as the

general manager of the Dairy Queen store (Stephen Napolitano Am Ans amp

Countercl ~~ 1 3-14) Plaintiff filed an answer to the counterclaim on March 7

2016 Both the civil action and family action were accepted for transfer to the

Business and Consumer Court in June 2016 Although not consolidated the

two cases are being coordinated before the Business and Consumer Court

Plaintiff filed a motion for partial summary judgment on Stephen

Napolitanos counterclaim on August 11 201 6 Stephen filed an opposition to

summary judgment on September 1 201 6 Plaintiff filed a timely reply on

z

September 8 2016 Oral argument on all pending motions in this case was held

on October 1 2 2016

STANDARD OF REVIEW

Summary judgment is appropriate if based on the parties statements of

material fact and the cited record there is no genuine issue of material fact and

the moving party is entitled to judgment as a matter of law MR Civ P 56(c)

Dyer v Dept of Transp_ 2008 ME 106 ~ 14 951 A2d 821 A fact is material

if it can affect the outcome of the case Dyer 2008 ME 106 ~ 14 951 A2d

821 A genuine issue of material fact exists if the fact finder must choose

between competing versions of the truth Id When deciding a motion for

summary judgment the court reviews the evidence in the light most favorable

to the non-moving party Id

If the party moving for summary judgment bears the burden of persuasion

on a claim or defense then the moving party must establish the existence of

each element of the claim or defense without dispute as to any material fact in

the record in order to obtain summary judgment Cach LLC v Kulas 2011 ME

70 ~ 9 21 A3d 1015 The burden then shifts to the non-moving party to

respond with specific material facts indicating a genuine issue for trial in order

to avoid summary judgment MR Civ P 56(e) Even if one partys version of

the facts appears more credible and persuasive any genuine issue of material

3

fact must be resolved by the fact finder regardless of the likelihood of success

Estate of Lewis v Concord Gen Mut Ins Co 2014 ME 34 ~ 10 87 A3d 732

ANALYSIS

Defendant Stephen Napolitanos counterclaim seeks a declaratory

judgment that he has an enforceable agreement with Plaintiff and Arthur

Napolitano that in exchange for agreeing to work full-time as the general

manager of the Dairy Queen store Stephen Napolitano was to receive (a) a

1 5 ownership share of Windham Q as soon as issues with his credit were

addressed and (b) Stephen would eventually receive a 50 ownership share of

Windham Q and associated real estate from Plaintiffs estate 1 (Stephen

Napolitano Am Ans amp Countercl r~ 3-4 13) Stephen also seeks injunctive

relief ordering Plaintiff to transfer 75 of her ownership in Windham Q to

Stephen Napolitano to be increased to 50 from her estate in compliance with

the terms of the agreement (Id r~ 13-1 4)

Plaintiffs sole argument on summary judgment is that Stephen

Napolitanos counterclaim is barred by the statute of frauds because there are

no writings evidencing the alleged agreement (Pl Mot Summ J 3-7 ) The

statute of frauds is an affirmative defense MR Civ P 8(c) Thus the statute

Stephen Napolitano asserts the remaining 50 ownership of Windham Q would be shared by his full siblings who are not parties to this litigation (Stephen Napolitano Am Ans amp Countercl ~ 3)

4

1

of frauds must be affirmatively pleaded in an answer otherwise it is waived

Greenlaw v Rodick 158 Me 440 445 185 A2d 895 897-98 (1962) An

affirmative defense may be adequately pleaded even though the exact words

used in Rule 8(c) are absent See Graffam v Geronda 304 A2d 76 78 (Me

1973) Rule 8(c) is satisfied by any clear and unmistakable notice that the

defense is being raised 2 Harvey Maine Civil Practice sect 85 at 362 (3d ed

2011)

Here Plaintiff has not expressly pleaded the statute of frauds as an

affirmative defense (Pl Ans to Countercl amp Affirm Defenses ii 1-7)

Plaintiffs first affirmative defense however avers that Stephen has no

agreement relating to his ownership of the Windham Dairy Queen that is

enforceable under Maine law (Id 1l 1) This language is sufficient to put

Stephen Napolitano on clear and unmistakable notice that Plaintiff is raising the

statute of frauds defense

Maines statute of frauds provides that the actions based on the following

agreements may not be maintained unless the agreement is in writing and

signed by the party to be charged therewith or by some person thereunto

lawfully authorized (a) any agreement that is not to be performed within one

year and (b) any agreement to give bequeath or devise by will to another any

real personal or mixed property 33 MRS sect 51 (5 ) (7)

5

To determine whether an alleged agreement is one not to be performed

within one year the court does not look to when the performance actually

occurred or whether it was conceivable that performance would occur within or

beyond one year The court looks only to the parties intent Great Hill Fill amp

Gravel v Shapleigh 1997 ME 75 -r S 692 A2d 928 The court must look to

the circumstances of the case and whether the parties plainly manifested an middot

intent that the contract not be performed within one year Id

Regarding an agreement to devise by will Maines Probate Code further

provides

A contract to make a will or devise or not to revoke a will or devise can be established only by ( 1 ) provisions of a will stating material provisions of the contract (2) an express reference in a will to a contract and extrinsic evidence proving the terms of the contract or (3) a writing signed by the decedent evidencing the contract The execution of a joint will or mutual wills does not create a presumption of a contract not to revoke the will or wills

18-A MRS sect 2-701

If an agreement falls within the statute of frauds then it must be

evidenced in writing and signed by the party against whom the agreement is to

be enforced or another lawfully authorized person 33 MRS sect 51 Nearly any

form of writing will satisfy the statute of frauds McCare v Rocha 2014 ME 4

-r 11 86 A3d 22 A series of writings may collectively satisfy the statute of

6

frauds even if none of the writings does so separately Wilson v DePapa 634

A2d 1252 1254 (Me 1993)

The part performance doctrine is an exception to the statute of frauds

Sullivan v Porter 2004 ME 134 ~ 10 861 A2d 625 An oral contract within

the statute of frauds may still be enforced if the party seeking to enforce the

agreement can prove by clear and convincing evidence (1) the parties entered

into a contract (2) the party seeking to enforce the contract partially

performed its obligation and (3) the performance was induced by the other

partys misrepresentation which may be evidenced by acquiescence or silence

Id at i 11 The part performance doctrine is grounded in the principle of

equitable estoppel which involves detrimental reliance induced by

misrepresentation and fraud Id I 17 Equitabl~ estoppel differs from

promissory estoppel which involves detrimental reliance on a mere promise Id

~ 1 7 n 7 The Law Court has expressly stated that for multi-year employment

agreements an employees detrimental reliance on an employers oral promise is

not enough to avoid the statute of frauds under the part performance doctrine

Stearns v Emery-Waterhouse Co 596 A2d 72 75 (Me 1991 ) To avoid the

statute of frauds under the part performance doctrine the employee must

prove by clear and convincing evidence that their performance was induced by

7

fraud on the part of the employer Id see also Suliivan 2004 ME 134 iI 17

861 A2d 625

A The 1 5 Ownership Interest in Windham Q

In support of her motion Plaintiff asserts there was no written agreement

governing Stephen Napolitanos employment with Windham Q there was no

written agreement to transfer a 1 5 ownership share of Windham Q to Stephen

Napolitano and that there was no agreement written or oral that Stephens

employment with Windham Q was contingent upon him receiving an ownership

interest (Pl Suppg SMF iiiI 8-9 14) Plaintiff asserts that even if there was

an oral agreement to transfer a 1 5 ownership interest Stephen has testified

that any transfer would not happen immediately because the agreement was

contingent upon Stephen resolving certain issues with his credit (Id iI 11 )

Plaintiff further asserts that Stephen Napolitano admitted that it would be a

few years before his credit issues would be cleared up (Id r 1 2) Thus

according to Plaintiff Stephen Napolitanos claim that there was agreement to

transfer a 1 5 ownership interest to him is barred by the statute of frauds as

an agreement not to be performed within one year (Pl Mot Summ J 4-5)

In opposition Stephen Napolitano admits that there was no written

agreement governing his employment and no written agreement to transfer a

15 ownership interest in Windham Q to him (Stephen Napolitano Opp SMF

8

mT 8-9) Stephen asserts however that Plaintiff has misstated his deposition

testimony Stephen did not testify that it would be a few years before his

credit issues would be cleared up (Stephen Napolitano Opp SMF iT 1 2)

Stephens actual testimony was that it ultimately was a few years specifically

two to three years before his credit issues were cleared up (Id) Stephen

asserts the parties had no understanding at the time the alleged oral agreement

was made that it would take Stephen more than a year to clear up his credit

issues (Id) Stephen asserts ~hat at that time he was anxious to resolve his

credit issues as soon as possible (Stephen Napolitano AddI SMF iT 9)

Viewing these facts in the light most favorable to Stephen Napolitano as

the non-moving party there are genuine issues of material fact whether the

parties plainly manifested an intent that the Stephens credit issues would not

be resolved in within one year Thus there is a genuine issue of material fact

whether the alleged agreement to transfer 1 5 ownership interest in Windham

Q to Stephen as soon as his credit issues were resolved is within the statute of

frauds Therefore summary judgment must be denied as to that issue

B The 50 OwnershiR Share of Windham Q from Plaintiffs Estate

Plaintiff asserts there was no written agreement to provide Stephen

Napolitano with any additional ownership interest in Windham Q from Plaintiffs

estate (Pl Suppg SMF i7 8) Thus according to Plaintiff Stephen

9

Napolitanos counterclaim that there was agreement to transfer a 50

ownership share of Windham Q and associated real estate to him Plaintiffs

estate is barred by the statute of frauds as any agreement to devise by will any

real personal or mixed property or as a contract to make a will or devise (Pl

Mot Summ J 4-5)

In opposition Stephen Napolitano asserts that the parties agreement is

evidenced in writing by Plaintiffs estate documents (Stephen Napolitano AddI

SMF i 11) A copy of Plaintiffs will executed on July 1 5 2010 is attached

to an affidavit by Arthur Napolitano (A Napolitano Aff Ex A) Plaintiffs will

devises most of her property including her interest in Windham Q to Arthur as

trustee of her separate Trust (A Napolitano Aff Ex A at 2) Plaintiffs will

references Stephens option to purchase 50 of her Trusts interest in

Windham Q (Id) A copy of Plaintiffs revocable trust agreement also

executed on July 1 5 2010 is also attached to Arthurs affidavit (Id Ex B)

Plaintiffs Trust agreement permits Arthur as trustee to authorize the sale of

the Trusts interest in Windham Q and associated real estate to Stephen

Napolitano at a discount (Id Ex B at 10) Plaintiffs Trust authorizes upon

the deaths of both Plaintiff and Arthur the distribution of 50 of the Trusts

interest in Windham Q to Stephen upon Stephens purchase of the remaining

50 of the Trusts interest (Id Ex B at 1 0-11 )

10

In her reply Plaintiff asserts the estate documents cited by Stephen

Napolitano have been superseded by more recent estate documents which do

not provide a purchase option or provide for Stephen to receive any interest in

Windham Qfrom Plaintiffs estate (Pl Reply SMF rr 11-1 5)

Even viewing these facts in the light most favorable to him Stephen

Napolitano has failed to put forth any facts evidencing the existence of a

written agreement to devise a 50 share of Windham Q to him in exchange for

his service as the general manager of the Dairy Queen store The estate

documents cited by Stephen do evidence that there was an option for Stephen

to purchase Plaintiffs interest from her Trust and that 50 of Plaintiffs

interest would be devised to Stephen upon her and Arthurs death and his

purchase of the remaining interest However the estate documents do not

evidence that these provisions were drafted as part of an agreement related to

Stephens employment The estate documents do not state the material

provisions of a contract to make a devise by will in exchange for Stephens

employment the estate documents do not reference any extrinsic evidence

proving the terms of a contract to make the devise in exchange for Stephens

employment and the estate documents do not constitute a writing signed by a

decedent evidencing any sort of contract regarding Stephens employment

Thus Stephen Napolitano has failed to satisfy the statute of frauds regarding

11

his assertion that there was an agreement to transfer a 50 ownership share of

Windham Qand associated real estate to him from Plaintiffs estate

Moreover Stephen Napolitano cannot rely on the part performance

exception to the statute of frauds Stephen asserts that as part of the

agreement he immediately assumed the position as general manager of the

Dairy Queen store at a salary below market-rate (Stephen Napolitano AddI

SMF -r 1 6) Stephen asserts he worked long and hard managing the Dairy

Queen for relatively little pay for more than sixteen years in reliance on the

alleged agreement with Plaintiff and Arthur Napolitano (Id rr 18-19)

Viewing those facts in the light most favorable to Stephen as the nonshy

moving party Stephen has middotset forth facts only demonstrating at most

detrimental reliance on a promise Stephen has set forth no facts

demonstrating by clear and convincing evidence that his performance was

induced by misrepresentations on the part of Plaintiff As discussed above

detrimental reliance on a mere promise is not enough to avoid the statute of

frauds Stearns 596 A2d at 75 The plaintiff must prove by clear and

convincing evidence that their performance was induced by fraud on the part of

the adverse party Id see also Sullivan 2004 ME 134 r 17 861 A2d 625

Because Stephen has set forth no evidence of fraud on the part of Plaintiff

1 2

Stephen Napolitanos claim does not fall within the part performance exception

to the statute of frauds

Therefore based on the foregoing Plaintiffs motion for summary

judgment must be granted as to Stephen Napolitanos claim that there was an

agreement to transfer a 50 ownership share of Windham Qand associated real

estate to him from Plaintiffs estate

CONCLUSION

Plaintiff Sandra L Napolitanos motion pursuant to Maine Rule of Civil

Procedure 56 for partial summary judgment is DENIED IN PART and

GRANTED IN PART Summary judgment is DENIED as to Stephen

Napolitanos counterclaim for declaratory judgment that there exists an

enforceable agreement to transfer a 15 ownership interest in Windham Q to

Stephen Napolitano as soon as his credit issues were resolved Summary

judgment is GRANTED for Plaintiff Sandra L Napolitano on Stephen

Napolitanos counterclaim for declaratory judgment that there was an

agreement to transfer a 50 ownership share of Windham Q and associated real

estate to him from Plaintiff Sandra L Napolitanos estate

1 3



Dated Richard Mulhern Judge Business amp Consumer Court

- oicnw on the Dockct_j_O)S flsect Copies sent via Mail___Jlectronicnlly_

14

According to Plaintiffs affidavit in the spring of 201 3 she became

concerned that Stephen Napolitano was using Windham Qs funds to pay his

personal expenses (Id ilif 3-4) Plaintiff requested that Arthur investigate the

matter (Id ~ 5) Arthur Napolitano assured her that Windham Q had not paid

any non-business expenses (Id) Plaintiff became concerned about Windham

Qs expenses again in May 2014 and requested that a forensic audit of Windham

Q be conducted (Id rr 6 8) Arthur opposed the audit (Id r 9)

Stephen Napolitano asserts that Windham Qs payment of certain

personal expenses was approved as part of his benefits package as the general

manager of the Dairy Queen (Stephen Napolitano Aff r 4) Stephen asserts

that in response to Plaintiffs complaints about the expenses Arthur Napolitano

increased his compensation and curtailed the practice of using Windham Qs

credit card to pay certain expenses (Id r 9) Plaintiff asserts that Arthur did

not discuss Windham Qs payment of Stephens personal expenses with her and

she did not approve the practice (Sandra Napolitano Aff rr 12 19)

According to Plaintiff Stephen Napolitano wrote a-letter to her -attorney

in October 201 4 admitting that certain personal expenses were paid for using

Windham Qs funds and stating that he was reimbursing Windham Q for those

expenses (Id r 14) Plaintiff does not believe that Stephen fully reimbursed

Windham Q for all of the personal expenses paid by the company (Id r 1 5)

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Referees Report)












4





STANDARD OF REVIEW
















5











ANALYSIS








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7












Pelletier 144 Me 245 249 68 AZd 9 11 (1949)






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9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









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Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14





















3








Referees Report)












4





STANDARD OF REVIEW
















5











ANALYSIS








6

















7












Pelletier 144 Me 245 249 68 AZd 9 11 (1949)






8





















9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14








Referees Report)












4





STANDARD OF REVIEW
















5











ANALYSIS








6

















7












Pelletier 144 Me 245 249 68 AZd 9 11 (1949)






8





















9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14





STANDARD OF REVIEW
















5











ANALYSIS








6

















7












Pelletier 144 Me 245 249 68 AZd 9 11 (1949)






8





















9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14











ANALYSIS








6

















7












Pelletier 144 Me 245 249 68 AZd 9 11 (1949)






8





















9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14

















7












Pelletier 144 Me 245 249 68 AZd 9 11 (1949)






8





















9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14












Pelletier 144 Me 245 249 68 AZd 9 11 (1949)






8





















9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14





















9



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14



















Track Inc 2003 ME 140 ~ 10 837 A2d 129

10

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14

CONCLUSION









11



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14



Plaintiff

v


Defendants







BACKGROUND




























z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14





















z


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14


on October 1 2 2016

STANDARD OF REVIEW


















3



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14



ANALYSIS

















4

1







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14







2011)














5









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14









provides


18-A MRS sect 2-701






6


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14


A2d 1252 1254 (Me 1993)


















7


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14


861 A2d 625



















8





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14





















9





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14





Mot Summ J 4-5)
















10





















11




















1 2







CONCLUSION











1 3





14





















11




















1 2







CONCLUSION











1 3





14




















1 2







CONCLUSION











1 3





14







CONCLUSION











1 3





14





14

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